Is the Problem That Not Enough Is Breaking?

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 30 September 2022

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. On today’s episode, NLW examines a theory articulated by folks like analyst Jim Bianco. His theory is, the biggest issue for equities markets right now isn’t that things are breaking but that while markets are down they’re down in an orderly fashion, unlikely to convince the Federal Reserve it needs to change policy anytime soon. - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company ensures the safety of your funds by employing five key fundamentals including real-time auditing and recently increased $775 million insurance on custodial assets. Learn more at nexo.io. - Chainalysis is the blockchain data platform. We provide data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies. Our data powers investigation, compliance and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases. For more information, visit www.chainalysis.com. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - I.D.E.A.S. 2022 by CoinDesk facilitates capital flow and market growth by connecting the digital economy with traditional finance through the presenter’s mainstage, capital allocation meeting rooms and sponsor expo floor. Use code BREAKDOWN20 for 20% off the General Pass. Learn more and register at coindesk.com/ideas. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “Razor Red” by Sam Barsh and “The Life We Had” by Moments. Image credit: Witthaya Prasongsin/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:14.8	The breakdown is sponsored by nexo.io, chain aliasis, and FtX, and produced and distributed by CoinDesk.
0:22.8	What's going on, guys? It is Thursday, September 29th, and today we're exploring the possibility
0:28.0	that the problem right now might be that things aren't breaking enough. Before we get into that,
0:33.7	however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the
0:41.2	breakers Discord. It's where you can debate silly assertions, like the problem is that things
0:45.7	aren't breaking, or just generally talk about crypto, markets, or whatever you want. You can find
0:50.5	a link in the show notes or go to bit.ly slash breakdown pod. Also a disclosure as always.
0:55.9	In addition to them being a sponsor of the show, I also work with FTX. All right, folks. So today,
1:01.6	we are looking at something interesting and perhaps a little bit counterintuitive. And I'm actually
1:06.8	recording this show just after I did the show about the Bank of England's
1:11.0	intervention in markets on Wednesday, because it's a show that I had been planning, and I feel
1:14.8	like they're a pretty good back-to-back pair. But I'm telling you when I'm recording it in
1:19.5	case something crazy happens between about 2 p.m. on Wednesday and when you're hearing
1:24.2	this that I don't talk about, now you know why. Anyway, what we're exploring today is the idea that the problem might be that things aren't
1:31.0	breaking enough. As you well know, the Federal Reserve is engaged in the most aggressive
1:35.6	monetary policy tightening in decades. The Fed is determined to break the back of inflation,
1:40.6	and if that determination isn't at any cost, it's certainly willing at the cost so far
1:45.2	of trillions of dollars of lost wealth in asset prices. As we've been discussing for now months,
1:51.6	Powell's Fed is terrified of falling into the trap of the 1970s, when the Arthur Burns led Fed
1:57.0	dithered on their commitment to beating back inflation, a scenario which eventually led to
	...

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